Business Succession Planning

One day you will stop running your business.

When you do, will your business stop running too?

The answer depends on you!

Sadly, too few business owners develop succession plans far enough in advance to make a successful hand-off or a sale of their business at the price and terms they consider fair value. Too much money is left on the table simply because the business wasn’t adequately designed and prepped for a change in ownership.

When you finish strong as the leader, everyone profits, including those who will be running the business after you. Succession planning begins with you, but you won’t win the race running it alone. It is a team effort of various professionals working in your company’s (and your) best interest to set proper expectations and to help you to achieve your desired result.

Where will you find the time? That’s the problem! You’re so engaged in running and growing your business that to focus on developing and executing a transition plan is challenging. Chances are you’ve never done it before.

For many business owners, succession planning is a counter-intuitive and extraordinarily uncomfortable foray. For others, despite the steep learning curve and unknown terrain, it can be a great joy because they anticipate the light at the end of the tunnel. In any case, because of the complexity plus the investment of time and money, business continuity and succession planning are easy to put off to another day. Yet, it may be one of the most costly procrastinations in your career.

On-Purpose Partners comes in to advise or co-lead the process with and/or for you. We’ll help you to prepare yourself, the business, and your team for the tough shift ahead.

Business transfers are a team sport. The psychological, business, legal, tax, and investment strategies, principles, and execution involved create a dazzling kaleidoscope of options. Sorting through the various iterations with wisdom and diligence can admittedly be tedious and seemingly unproductive. Seemingly slight matters, however, can make all the difference on the other side of the transfer. We’ll orchestrate with the other consulting professionals and keep your deal moving to closure on offense. Defensively, you definitely don’t want to get caught under duress. For most business owners the successful and profitable transfer of your business will be the greatest single financial payday of your career. Can you risk going it alone?

Successful succession planning is a proactive offensive strategy. Unfortunately, it almost always takes much longer than expected to nurture a positive end result and smooth transition. We’ll also keep you accountable to the working guidelines and time frames we co-establish to meet your objectives.

Long before you’re ready to bring in your accountant, lawyer, financial advisor, and investment banker or business broker, let’s begin by cultivating and developing your company and team for what will come next. Much of this initial conversation and early exploratory work is done in confidence from your top executives. We’ll explore your many options, such as an ESOP, merger, partnership, outright sale, leveraged buyout, and so forth. Privacy provides you a safe haven to put voice to your needs, hopes, and concerns without fear of rumors and misinformation spreading through the company or marketplace.

We’ll work on a transition timetable. Much of our initial work is focused on enhancing and codifying current business operations, culture, and leadership so the business is less owner-centric and dependent. This makes the business far more viable and sustainable on its own … and therefore, more valuable.

Sales increases and corresponding profits are often produced because of this early advisory work and shift in orientation and leadership. Energy and excitement will course through the business. An upward sales and profit trend also produces a higher overall financial performance, such as the EBITDA and book value. Ultimately, these efforts can preserve and enhance business value, achieve higher multiples, and help you get what the business or your interest is worth.

Areas of focus for these engagements typically begin with but aren’t limited to:

Financial analysis

Leadership assessment

Business model assessment

Marketing and sales effectiveness assessment

Corporate culture

Communications plan

Customer analysis

Investment: Due to the complexity, confidentiality, and many variables, an investment figure is much more of a case-by-case matter. Anticipate an initial fixed fee consultation, assessment, and recommendations. A separate initial business valuation may be in order to establish a current value for planning purposes. In addition, anticipate legal and accounting fees.

After the initial assessment, the engagement is likely to be a monthly retainer and participation provision to provide predictability, control, and mutual alignment of interests. The monthly retainer will be comparable to the monthly salary of your C-Suite executives. Anticipate additional professional fees, for example for a CPA, Attorney, Financial Advisor, and Investment Banker. Depending upon your exit schedule the engagement may run for 6 months to years. In the end, when we do our job right we’ll more than pay for ourselves because of the real term gains in the business that are realized at the transition.

Disclosure: On-Purpose Partners is a dba of US Partners, Inc. which also has a dba named US Partners Real Estate, a Florida licensed real estate brokerage.

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